Consumers across the nation have filed complaints with Better Business Bureau about a group of Connecticut-based companies involved in advance fee loan scams – loans that require upfront payment of fees in order to secure credit.

According to complaints filed with Better Business Bureau this spring, victims across the country lost an estimated quarter of a million dollars to phony lenders who took their money and ran, leaving the applicants in an even worse financial situation than they began with.

That is what happened to an East Haven, Connecticut man who wired more than $1,200 as a security deposit to a company calling itself Mont Samson Financial, for a $20,000 loan.

Despite recent improvements in the economy, lending standards remain stringent, leading cash-strapped consumers to turn to fraudulent lenders who promise loans regardless of the applicants’ credit history.

Complaints received by BBB are likely to be only the tip of the iceberg, according to Connecticut Better Business Bureau President, Paulette Scarpetti.

“We know from experience that the victims who file complaints with BBB represent a vocal minority, and that many other consumers across the nation may be falling prey to these schemes,” she said. “The worst part is that people being targeted are already suffering tremendous financial hardship.”

BBB recently received complaints about advance fee loan scammers that create, steal or modify more than 75 different company names for their operations, including Acclaim Equity Group, American Linx Financial, Capital Alliance Financial Group, Hartford Financial Services, Hazelton Financial, Howard and Clark Financial, Mont Samson Financial, Transgroup Services and Trillium Investment Lending, among others.

Advance fee loan scammers are known to illegally use names or slightly altered versions of names of legitimate companies to lend credibility to their sales pitches.

Most victims stumble upon advance fee lenders online in classified ads on sites such as craigslist.com, or in local Thrifty Nickel publications.  Advance fee loan operators try to stay a step ahead of legal action by putting up Web sites for limited periods, taking them down within a few weeks and replacing them with a new site under a new name and fake business address.

The Web sites look professional and often require the victim to fill out an application form that asks for bank account and Social Security numbers. The applicant eventually is told the loan is approved and required to pay thousands of dollars in upfront fees, supposedly to cover the cost of loan insurance and as collateral.  The victim never receives a loan and may even be tricked into paying the scammers even more money.

BBB advises cash-strapped individuals and small business owners to recognize the red flags of an advance fee loan scam

• The lender has a bad reputation—or none at all.  Research the lender thoroughly online and with your BBB. Most trustworthy lenders have an established track record; be wary if you can’t find much information about the lender online.
• The lender is not registered to do business in the state. Check with state financial or banking regulators.
• The lender asks you to wire money or send a money order before you can receive the loan. If you are instructed to wire money to another country consider this yet another red flag.

If you’ve become a victim of an advance fee loan scam, contact BBB by calling (520)888-5353 or visit, www.tucson.bbb.org, and report the incident to your police department. If you were asked to wire money to Canada, file a complaint with Canadian law enforcement by calling toll free: 1-888-495-8501 or e-mail: info@phonebusters.com.

Better Business Bureau of Southern Arizona is warning consumers of Jefferson High School Online (JHSO), an unaccredited, Nogales-based online high school offering high school diplomas based partly on life experience.

BBB has received28 complaints, seven of which are unanswered, in the last year from consumers all over the country who say they passed JHSO’s online test and paid over $200 to receive a high school diploma. When the students tried to enroll in college using the diploma they were told that it was not valid.

“I found them online and I thought it was legit,” said Debra Harris, a student in Houston, who completed and paid for a JHSO diploma. “I tried to use it to get into a college and they said they weren’t accredited and it wasn’t good for anything.”

James Phillips, a student from Portsmouth, Ohio said he felt deceived when he tried to use his JHSO diploma to apply at Colorado Technical University and his advisor told him JHSO had been “red flagged” by the college.

“They told me I couldn’t start classes with that diploma, it’s no good,” Phillips said. “You look at the diploma and it looks exactly like a normal diploma, just with a different name.”

Bill Ahmed, a Career Counselor at Colorado Technical University, said illegitimate online high schools or “diploma mills” often use similar names to actual high schools to fool students and colleges into thinking they’re legitimate.

“We have an entire list of schools that we’ve red flagged,” Ahmed said. “If a student applies using a diploma from one of those schools it will pop up in our system.”

A BBB investigation found that JHSO advertisements often appear as sponsored links on Google or Yahoo! under the search phrase “high school diploma.” If prospective students click on the sponsored link it takes them to JHCO’s website, where they are prompted to take a free test to qualify for a high school diploma.

The first part of the test is a questionnaire that asks students several “life experience” questions, including what type of music they like, how often they listen to music, how often they read, and how physically active they are. JHSO’s website says the answers on this portion of the test will count toward the students “elective and life experiences credits.”

After students complete the life experience questionnaire they are given a multiple choice test in language arts, mathematics, science, and social studies. If a student answers a question incorrectly they are given a hint, and three more chances to select the correct answer from the four possible answers given for each question.

Students can take the test for free, but once they finish the test JHSO charges $200 for an “official JHSO diploma” and “official JHSO transcripts.”

JHSO is owned by MMDS Ltd., based out of St. Kitts, a small country in the eastern Caribbean. They have a physical office in Sonora, Mexico and have a PostNet drop box in Nogales, Arizona located at 411 N. (more…)

Better Business Bureau of Southern Arizona has verified that the Census Bureau has started calling some households to clarify information about the number of people living at the addresses.

The calls started on April 11, and are scheduled to be made through mid August, a Census Bureau official told BBB. If a consumer receives a call from someone claiming they’re with the Census Bureau, they can call 866-851-2010 to make sure the call was legitimate.

As was the case with the Census mailing, and door-to-door data gathering, the Census Bureau will not ask for your social security number, bank information, or any sensitive personal information if they call you.

If you receive a phone call from someone claiming to be from the Census Bureau and they ask for any personal information hang-up immediately and report the call to BBB by calling (520)888-5353 or by visiting http://www.tucson.bbb.org.